NVIDIA pullback fails to break its uptrend

NVIDIA stock is now witnessing a textbook correction—a healthy pause within a broader uptrend. After bottoming out at $189.51 in late July, shares staged an impressive 20% recovery, peaking at $227.54 in mid-August. Since then, the rally has cooled as investors have turned cautious in anticipation of the company's earnings report. The shift from impulsive growth to consolidation is backed by technical signals that point to a temporary slowdown in buying pressure, not the uptrend itself. 

The charts offer the first clue. Bollinger Bands tell a clear story: the price, now at $219.39, is holding above the $211.98 midline, though it remains below the upper band of $234.55. Meanwhile, the distance between them is widening, a sign that market volatility has picked up during the previous rally.

The Relative Strength Index (RSI) has retreated from overbought territory, signaling that bullish momentum is taking a breather, which is a classic setup for a short‑term pullback. This is a healthy development, not a cause for alarm. The Average True Range (ATR) Indicator echoes the view: it has dropped from recent highs, compressing the expected daily range to $6–$7. Such a volatility squeeze is typical after a strong move, as the market digests gains before deciding on its next direction. 

Fundamentally, the picture is mixed. On a positive note, NVIDIA is doubling down on its AI push with investments in SB Energy for the OpenAI data center and securing approval to supply H200 chips to China. On the flip side, macro headwinds and geopolitical tensions are prompting some institutional investors to take profits. This tug‑of‑war between optimism and caution is keeping the stock in check. 

The real catalyst lies ahead: NVIDIA's second-quarter (Q2) earnings report on August 26. With lofty expectations for data center revenue and Blackwell sales, the results could either reignite the rally or, if they disappoint, spark a sharp correction.

For those looking to act, here is the trading plan:

Buy NVIDIA shares from current levels ($219.00–$220.00). Lock in profits at $229.60. Place Stop loss at $213.60.

This forecast holds true from August 19 till August 26, 2026.